December 23, 2011
A recent reader left a message in our comments section asking, “If u live in Minnesota what the requirements for down payments on FHA loan?”
Some FHA loan applicants may have the mistaken impression that FHA rules for down payments vary from state to state, so we thought it important to dispel that notion once and for all. FHA loan rules state there is a minimum down payment of 3.5%.
According to the FHA official site (on the Let FHA Loans Help You page), “Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.”
However, FHA loan applicants should know there may be additional factors that affect the amount of the down payment. A borrower may not qualify for the lowest required down payment if there are credit issues or other factors that affect credit worthiness. A participating FHA lender may also have a higher down payment requirement based on other issues.
So while the FHA rules don’t change state by state, the amount of your down payment could vary depending on individual circumstances. Borrowers should not expect to be given the same terms or conditions on an FHA loan as a friend or fellow borrower, and the lender’s requirements could vary from loan to loan for a variety of reasons.
But borrowers should expect to be given equal consideration based solely on qualifying criteria such as credit history, ability to repay and other factors. Discriminatory or predatory lending is not permitted under FHA loan rules–borrowers can’t be given higher down payment requirements based on non-qualifying data such as race, country of origin, family status, or any other criteria forbidden under Fair Housing Act regulations.
To learn more about Fair Housing rules, review http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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